Depreciation Calculator — Income Tax Act WDV & SLM Method
Calculate depreciation under the Income Tax Act 1961 using WDV (Written Down Value) or SLM (Straight Line) method. Select your asset category (buildings, P&M, computers, vehicles, furniture, intangibles) — the tool auto-sets the correct IT Act rate. Get year-wise depreciation schedule, accumulated depreciation, closing WDV/book value, and tax savings. Supports the 180-day half-year rule for first-year assets.
Calculate Depreciation
How to Use the Depreciation Calculator
This tool computes depreciation as per Income Tax Act, 1961 Section 32 rules. WDV method is mandatory for income tax purposes. SLM is provided for Companies Act reference.
Step 1 — Select Asset Category
Choose from 7 pre-set categories (auto-sets IT Act rate) or Custom for any rate. Rates are as per the IT Act depreciation schedule.
Step 2 — Enter Cost and Adjust Rate
Set asset cost and verify the rate. Adjust if your specific asset has a different rate (e.g., energy-saving devices at 40%).
Step 3 — Choose Method and Half-Year Rule
Select WDV (mandatory for IT) or SLM. If the asset was used for less than 180 days in year 1, select “No” for half-rate in the first year.
CA Tip: Under IT Act, assets are grouped into “blocks” by rate. Depreciation is on the block, not individual assets. When filing ITR, compute block-wise depreciation. The ICAI recommends maintaining a fixed asset register with block-wise tracking for audit-ready compliance.
Depreciation Rates Under Income Tax Act
| Asset Category | WDV Rate | Half-Year Rate | Block |
|---|---|---|---|
| Building — Residential | 5% | 2.5% | Block 1 |
| Building — Non-Residential | 10% | 5% | Block 2 |
| Building — Temporary (wooden) | 40% | 20% | Block 3 |
| Furniture & Fittings | 10% | 5% | Block 4 |
| Plant & Machinery (General) | 15% | 7.5% | Block 5 |
| Motor Vehicles | 15% | 7.5% | Block 5 |
| Computers & Software | 40% | 20% | Block 6 |
| Energy-Saving Devices | 40% | 20% | Block 6 |
| Intangible Assets | 25% | 12.5% | Block 7 |
| Ships / Vessels | 20% | 10% | Block 8 |
Key Depreciation Rules
- Block concept: Assets with same rate are grouped. Depreciation is on block total, not individual items.
- 180-day rule: If asset used < 180 days in acquisition year, only 50% of rate allowed in year 1.
- Additional depreciation: Manufacturing businesses get extra 20% on new P&M under Sec 32(1)(iia) in year 1.
- No depreciation on land: Land is non-depreciable. Separate land and building value in purchase deeds.
- Sale of asset: Sale price reduces block. If block becomes negative, excess is STCG under Sec 50.
- Unabsorbed depreciation: Can be carried forward indefinitely (no 8-year limit unlike business losses).
Tax Savings from Depreciation
Tax Saving = Depreciation × Tax Rate
Example (₹10L computer, 40%, 25% tax):
Year 1 Depreciation = ₹4,00,000
Tax Saving = 4,00,000 × 0.25 = ₹1,00,000
Effective cost = ₹10L − ₹1L = ₹9,00,000
Expert Tip: Time your capital expenditure to maximise depreciation. Assets put to use before 1st October get full-year depreciation. After 1st October, only half-year rate applies. This can save significant tax in the year of purchase. Talk to our CA team →
Need depreciation help? Our CAs handle fixed asset register maintenance, block-wise depreciation, ITR filing, and tax audit support. Talk to a CA today →
